If Abbott scrapped carbon tax – a minefield of court action would follow!

Scrapping green bank would incur ‘huge cost’April 3, 2013 The Age Heath Aston Political reporter Tony Abbott’s ”pledge in blood” to scrap the carbon tax and dismantle the agency ploughing billions of dollars into renewable energy projects will cost taxpayers more in compensation and legal costs than the financial benefit of abolishing the system, it is claimed.

A report by law firm Norton Rose has highlighted the minefield of court action that would result from any move to wind up the Clean Energy Finance Corporation. The corporation, which has $10 billion to spend on renewables and energy efficiency programs over five years, is preparing to sign off on a first tranche of multi-year contracts to begin on July 1.

The Coalition has promised to abolish the corporation and tear up the contracts if it wins power in September.

Elisa De Wit, author of the report, said terminating the green contracts would trigger compensation payments that could ”quite possibly” be billions of dollars. ”In our experience of these arrangements, it is not uncommon for the compensation obligations on government to outweigh the financial benefit of termination,” her report stated.

The report found an Abbott government would be forced to retain the corporation or replace it with a new agency to oversee contracts it could not break. The opposition has not revealed exactly how it will abolish the clean energy contracts but has warned the industry that it intends to do so.

…… A spokeswoman for the Clean Energy Finance Corporation said it was obliged under legislation to push ahead with making investment decisions.